Finland will impose no new sanctions on Russia – Finnish PM

Finland will impose no additional sanctions on Russia in response to Moscow’s ban of food imports from some EU countries, said Finnish Prime Minister before the presidents of the two countries are set to meet on Friday in the Black Sea resort of Sochi.

The Russian President will meet his Finnish counterpart Sauli
Niinisto in Sochi, on Russia's Black Sea coast, where Putin has a
residence on Friday, the president’s press service said. Niinist
is the first president of a European country to visit Russia in
an official capacity since the escalation of the crisis in
Ukraine.

The heads of state are to discuss the "peaceful settlement of
the internal political crisis in Ukraine and measures to prevent
a humanitarian catastrophe", the Kremlin said. Among other
issues the presidents will talks about the current state and
prospects of bilateral cooperation between Russia and Finland,
the Kremlin added.

The office of the Finnish president also stated that the meeting
would focus on the Ukraine crisis. However a source told Reuters
that Finland is not planning to act as a mediator in resolving
tensions between Russia and the West.

The Finnish side had requested the meeting with Russia’s head of
state last week, following Russia’s ban on food imports from the
EU, US, Australia, Canada, and Norway. The ban was introduced on
August 7 for one year and came in response to Western sanctions
imposed on Russia over the Ukraine crisis.

On Wednesday, Finnish Prime Minister Alexander Stubb announced
that the country will impose no additional sanctions on Russia in
retaliation to the food ban. Stubb added that he had informed the
EU leadership and German Chancellor Angela Merkel about his
country's decision.

“My message to them had two points. First, we will impose no
sanctions in response. Second, our agrarian sector needs certain
assistance," he told the Yle television company. Stubb added
that Helsinki has good and mutually beneficial relations with
Moscow.

Russia is Finland's third-biggest export market, while its
companies are major suppliers of milk and other dairy products to
Russian supermarkets.

The European countries that fell under the Russian food ban have
been hit hard by the sanctions. Last year Russia bought $16
billion worth of food from the 28-nation bloc, or about 10
percent of total exports, according to Eurostat. In terms of
losses, Germany, Poland and the Netherlands were the top three EU
food suppliers to Russia in 2013.

The German Farmers’ Association (Deutscher Bauernverband) said
the move could cause an increase of supply on the EU’s internal
market which would put additional pressure on local producers.

According to experts from Denmark’s largest bank, Danske Bank,
the sanctions imposed by both sides are to last no longer than
three months.

“We believe an escalating trade war would be unbearable for
both Russia and the EU, and that the EU will revoke the sanctions
within one to three months, with Russia abolishing its own
sanctions,” said the bank’s report called 'The Ukrainian
Crisis: the Nordic angle' on Thursday.

At the end of July, the EU imposed an additional round of
sanctions targeting financial, energy and defense sectors of the
Russian economy. The sectorial sanctions targeted five major
Russian banks, including the country’s biggest, Sberbank. These
financial entities were banned from raising capital on the EU’s
financial markets. The EU sanctions followed a fresh round of US
sanctions also targeting financial and energy sectors.